The company won’t heed calls by some analysts and investors
to release existing game titles for smartphones, Iwata said at a
briefing today in Tokyo. Nintendo fell 4.3 percent to close at
12,325 yen after saying it will stick with its main business
model focusing on both gaming hardware and software.

Iwata is under pressure to revive profit after customers
shunned the Wii U, the company’s latest home-gaming machine,
causing it to cut sales forecasts and project an annual net
loss. Nintendo plans to explore new business areas and boost
licensing of its characters such as Mario and Zelda, the 54-year-old executive said.

“I don’t think the market will value this business plan,”
said Mitsushige Akino, chief fund manager at Ichiyoshi Asset
Management Co. in Tokyo. “Nintendo has to find a way to win
back casual gamers. The licensing business isn’t new.”

Nintendo rose as much as 7.5 percent in early trading after
saying yesterday it will spend as much as 125 billion yen ($1.2
billion) buying back as many as 10 million shares, or about 7.8
percent of outstanding shares. Japan’s benchmark Nikkei 225
Stock Average declined 2.5 percent.

“I don’t see any path to an earnings recovery in the short
term,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho
Asset Management Co. “The business plan was as I expected. I
didn’t foresee any drastic changes.”

Casual Gamers

The casual gamers who made Nintendo the leader of a $93
billion industry have abandoned its standalone machines like the
Wii U for cheap downloads they can play on a Samsung Electronics
Co. Galaxy phone or an Apple Inc. iPad. New, faster consoles
from Sony Corp. and Microsoft Corp. have run away with the
hardcore players still willing to pay $400 for a machine and $60
for a title like “Call of Duty.”

Nintendo on Jan. 17 revised its profit forecast, projecting
a 25 billion yen ($245 million) net loss for the fiscal year
ending March, compared with its previous 55 billion yen profit
estimate. The company lowered its sales forecast for the Wii U
to 2.8 million consoles from 9 million and halved its projection
for Wii U game sales to 19 million units.

Nintendo is developing a “service application” for smart
devices for release this year that will help strengthen the
company’s ties with consumers, Iwata said today. The company
hasn’t ruled out the possibility of the application including
games or Nintendo game characters, though it doesn’t plan any
outright release of titles for smartphones.

Health Business

“Simply releasing our games just as they are on smart
devices would not provide the best entertainment for smart
devices, so we are not going to take any approach of this
nature,” Iwata said in comments posted on Nintendo’s website.

Tying Nintendo’s iconic characters to its hardware helped
boost demand for the original Wii, which sold more than 100
million units and became the world’s best-selling console.

Nintendo also plans to start a new health-related business
by March 2016 that will include hardware and software. It will
be an entertaining “non-game” business using non-wearable
devices and will help “boost users’ quality of life in terms of
health,” Iwata said, without giving additional specifics.

Iwata said the company may consider acquisitions or capital
alliances as it seeks to expand its licensing business.

Iwata will cut his pay from February to June, and other
company directors will take pay cuts of as much as 30 percent,
the company said yesterday. The president has said he won’t step
down after about 12 years running the company.